NetAction Notes

IN THIS ISSUE:

This issue of NetAction Notes was written by Michael Stein, who may be
familiar to readers as co-author of the Virtual Activist, NetAction's
online training course on Internet advocacy. (Michael's bio is
included below.)

We are pleased that Michael has agreed to contribute to the
newsletter, and to answer readers' questions about nonprofits online.
Readers are invited to send questions to
michaelnetaction.org.
Questions of general interest will be
answered in future issues of the newsletter.

Because it's the holiday season and the buzz these days among nonprofits
online is e-philanthropy, I've dedicated all the content below to covering
this issue. I get a lot of questions emailed to me on this topic, so I've
structured it as a series of FAQs (Frequently Asked Questions).

QUESTION: My nonprofit has been receiving phone calls and emails from a
number of different companies that propose to help us fundraise on the
Internet. What's the difference between all these companies?

ANSWER: These companies tend to fall into three categories. The FIRST
category are the "charity portals," Web sites that offer a directory of
nonprofits, of which you'd be one of many. Their job is to attract lots of
traffic to their site, and encourage visitors to make contributions to the
nonprofits listed. Often your listing is free, and the portal accepts
secure credit card contributions on your behalf. Some charge a fee when
you get a contribution. These portals make their money either from
advertizing on their site or through the fees they charge the nonprofit.
Examples include www.helping.org
and www.charitableway.com. The SECOND
category are the "payment service providers," that specialize in setting up
secure credit card systems for nonprofits. They make their money through a
fee structure based on the contributions you receive. The nonprofit puts a
button on its site so that when a visitor is ready to give, they get
switched over for the transaction to take place. Examples include
www.entango.com and
www.remit.net. The THIRD category are "e-commerce
commission portals" where you actively encourage your members to do their
e-commerce shopping through a portal, and a percentage of the purchases
goes to the nonprofit of your choice. Examples include
www.4charity.com,
http://www.greatergood.com/,
www.shopforchange.com.

QUESTION: I hear a lot of news about helping.org as a free service to
accept online donations offered by AOL. What do you think about helping.org?

ANSWER: I think that the AOL Foundation and
www.helping.org are doing a
great job of bringing electronic philanthropy into the mainstream of the
Internet and helping small nonprofits obtain online fundraising in an easy
and affordable manner. We all know that online fundraising for nonprofits
still has a long way to go before it makes a dent in revenue projections.
We can safely assume (just like with e-commerce) that people will
eventually become more familiar and comfortable making donations online.
This change in attitudes will benefit everyone who is using the Internet to
fundraise.

QUESTION: How do I choose between the various services to find the right
solution for my nonprofit?

ANSWER: Let me paraphrase an answer from Kurt Hansen, the CEO and Founder
of www.CharityWeb.net,
from a post he made recently on a listserv devoted to
online fundraising. He suggested that if you're a nonprofit charity with
less than a $2 million annual budget or with little traffic through your
Web site, then you should probably use www.helping.org or a similar charity
portal. It's probably not worth the investment of time and energy to do it
any other way. If you get a surge of donations or you want to add a
shopping cart, then you can look for a more custom alternative. Charities
with more than a $2 million budget, with lots of traffic through their
site, or who want to sell things from their site should look at a custom
solution with one of the payment service providers.

QUESTION: What questions should I ask an online fundraising service that
wants me to sign up with them?

ANSWER: Get all the information you can about how their service works.
Examine their Web site in complete detail to see how they present their
service, and how they feature the nonprofits that are signed up with them.
Make sure you have a very good understanding of what fees you might have to
pay when you receive a donation, or any signup or monthly fees. Don't get
forced into signing a multi-year contract if you're not comfortable with
that. Tell the service that you want a shorter contract so you can
evaluate the effectiveness of their service. Get referrals from other
nonprofits that have signed up, and try to find out how much money they've
raised through the service. Ask about how the service promotes itself
through marketing and advertizing. You want to know how hard they're
working on your behalf. And finally, make sure you understand what the
service requires YOU to do as part of the deal. Some ask for buttons on
your home page or announcements in your email newsletters.

QUESTION: Where can I learn more and follow developments in this field?

ANSWER: I highly recommend the Online Fundraising Mailing List offered by
Michael Gilbert of The Gilbert Center in Seattle. To subscribe to the
Online Fundraising Mailing list, send email to
autosharegilbert.org (from
the address at which you wish to be subscribed) with the words subscribe fundraising
in the body of the message. To learn more
about The Gilbert Center visit http://www.gilbert.org.

Got a question about nonprofits online? Ask Michael: Send your questions
to Michael Stein at
michaelnetaction.org.
Questions of general interest will be answered in a future issue of
NetAction Notes.

Michael Stein is a Internet strategist with a decade of experience working
with advocacy groups, non profits and labor unions. He is the author of
two books about the Internet including "Fundraising on the Internet:
Recruiting and Renewing Donors Online," with Mal Warwick and Nick Allen
(Strathmoor Press, 1997). He is currently the Manager of Internet Presence
at the Support Center for Nonprofit Management in San Francisco, and a
consultant with Resourceful Internet Solutions, an Internet consulting firm
serving mediators, nonprofits and unions. Recent Internet projects have
included the California Labor Federation, Children Now, Environmental Defense
Fund, SEIU California State Council, Landmark Education, Independent Media
Institute, Women's Economic Agenda Project and Peninsula Open Space Trust.
He is a frequent advisor and lecturer on Internet strategy to nonprofits
nationwide, and has been featured in The Chronicle of Philanthropy and The
Industry Standard. He can be reached at
michaelaether.com.

NetAction Notes is a free electronic newsletter, published by NetAction. NetAction
is a California-based non-profit organization dedicated to promoting use of
the Internet for grassroots citizen action, and to educating the public, policy
makers, and the media about technology policy issues.

To subscribe to NetAction Notes, send a message to:
majordomo netaction.org
.
The body of the message should state: subscribe netaction
To unsubscribe at any time, send a message to:
majordomo netaction.org
.
The body of the message should state: unsubscribe netaction

For more information contact NetAction by phone at (415) 215-9392, by E-mail
at